A Case of Sex Appealed

Share

A Case of Sex Appealed

Some people might have thought the battle for control of the domain name sex.com ended last week, when a federal judge ordered the coveted slice of online real estate returned to its original owner.

Well, they can think again.

Stephen Michael Cohen, the man who operated the porn site for the past five years, is now asking a judge to suspend a transfer of the domain back to Gary Kremen, the San Francisco entrepreneur who first registered the site more than six years ago.

In a motion filed in federal court in San Jose, California, Cohen's lawyers say they plan to appeal the case to the Ninth Circuit Court of Appeals in San Francisco. For now, Cohen is asking the San Jose court to put the sex.com domain transfer on hold during the appeal or make Kremen put down a cash bond to cover potential losses that could accumulate as the case proceeds.

The argument is that without sex.com, Cohen's business is toast.

"With respect to transfer of the domain name sex.com, there can be no dispute that this in effect disposed of defendants' entire business and source of income," Cohen's attorney, Robert Dorband, wrote in the filing. "To conclude that irreparable injury would result absent a stay would be nothing less than an understatement."

Kremen's lawyers fired back Tuesday, calling the move by Cohen's attorneys a "last-ditch effort to continue to profit from their ill-gotten gains." They argued in a counter-filing that Cohen never had a legal right to the sex.com domain and therefore has no right to complain about losing it.

The filing and counter-filing mark the latest developments in a longstanding lawsuit initiated by Kremen, who claimed that Cohen illegally gained control of the sex.com domain in 1995 through a fraudulent letter.

Kremen gained a transient victory last week, when U.S. Judge James Ware ruled that Cohen's claim to sex.com is null and void because the domain was transferred to his hands only through a forged letter drafted in the name of his former housemate. Following the ruling, domain name registrar Network Solutions transferred the registration of the domain to Kremen's name.

The judge also ordered Cohen and Ocean Fund International, the former registered owner of the sex.com domain, to provide "a full accounting" of the financial operations of the site, including a listing of all money made from the enterprise since 1995.

Ware also told Cohen and the Ocean Fund to provide $25 million to be held by the court pending final judgment and assessment of damages.

In their latest motion, Cohen's attorneys argued that the judge's financial demands are unreasonable.

"Defendants do not have $25 million, and have no ability to raise that amount of money," the motion states. Attorneys cite a declaration by Cohen valuing his personal assets at approximately $700,000. The assets of Ynata Ltd., an alternate name for the British Virgin Islands-based Ocean Fund total less than $1 million without sex.com.

Kremen's attorneys dismissed the argument as hogwash, noting that Cohen has repeatedly said under oath that sex.com generates millions of dollars in revenue each year. They also noted that Cohen currently owns a house valued at more than $3 million.

Cohen's motion also questions the judge's assertion that Cohen's former housemate, Sharyn Dimmick, did not sign a letter drafted in her name and sent to Network Solutions with a request to transfer ownership of the sex.com domain.

"Although the court is correct, in the sense that there is no direct evidence that Sharyn Dimmick signed the letter, there certainly is sufficient circumstantial evidence raising an issue of fact in this regard," the filing states.

Kremen's attorneys said that Cohen would have little hope of prevailing on that claim on appeal, since it had already been rejected in Ware's courtroom.

While the appeal winds its way through the court system, Kremen is devoting himself to figuring out what exactly to do with the domain he spent so much time and money to recover.

Thus far, the San Francisco businessman, whose former entrepreneurial ventures includes matchmaking site Match.com, has declared that his goal is to create something "tasteful and less disgusting" than the site Cohen developed. Under Cohen's leadership, sex.com has consisted largely of pop-up windows and banner ads, many containing hardcore pornographic images.

Kremen expects it will be rather easy to create a classier incarnation of sex.com. Developing a more profitable version of the site, which Cohen has claimed nets millions of dollars each year, could prove a more difficult matter.